The FCA pricing reform deadline is fast approaching this Friday, but there is help in answering the key questions

By Content Director Saxon East

Judge a man by his questions rather than by his answers.

Saxon East

Saxon East

The words of 18th century French philosopher Voltaire ring true today for intermediaries as they seek to understand the implications of the FCA’s pricing and fair value regulatory reforms.

The key questions intermediaries are asking themselves are: 

  • What are the overall implications of the changes? 
  • What exactly do I need to understand in my business model? 
  • How much fresh oversight will be required from parties across the distribution chain? 

The enhanced rules on product governance come into force on Friday 1 October. 

The realisation that these reforms will affect everyone in the manufacturing and distribution chain is becoming ever more apparent.

All parties will need to have a better understanding of each other’s business models. 

Here’s an example. 

An insurer may believe the product it is producing is fair and appropriate, but if the distribution chain is taking excessive commissions or unfairly sticking on administration fees, then the insurer is culpable.  

Some products, such as tradesman, are highlighted by the FCA as egregious offenders. Urgent governance work will be needed. 

Getting information to flow across the chain will be a challenge.

The FCA understands this and is not going to come knocking on your door at the crack of dawn, hours after the deadline has expired. 

What the regulator wants to see is that firms are prepared well for the changes.

For those still unsure, it is well worth joining our BrokerFest event on 11 October 2021. 

Former FCA general insurance director Michael Sicsic will be speaking, as well as taking questions. 

Click here to register for this fantastic event. It also offers great networking opportunities and is one of the first UK general insurance information events post-Covid.

BrokerFest 2021